The B2B Revenue Executive Experience
The B2B Revenue Executive Experience

Episode · 4 years ago

Les Trachtman on Why Founders Often Make Terrible CEOs

ABOUT THIS EPISODE

Quite commonly, founders make terrible CEOs.

They often have a difficult time segregating their personal relationships with their founding teams from the objective reality of the situation. That’s not an attack on founders: it’s hard time starting a company from scratch, and you often have to have a band of loyal followers in the beginning. The problem is that a company, once it scales, usually needs much different talent.

In this episode Les Trachtman, CEO of Purview, shares from his experiences taking over the CEO role from six different founders. He also talks about his upcoming book, Don’t F*** It Up (and 31 other things a founder should never say).

Are you concerned about hitting yourrevenue targets this month quarter or year? Your answer is value: primesolutions, a sales, training and marketing optimization companyleveraging the valueselling framework visit, www, dot value, primeSOLUTIONSCOM and start accelerating your results. You're listening to the BTB revenueexecutive experience, a podcast, dedicated elpin executives, train theirsales and marketing teams to optimize growth. Whether you're looking fortechniques and strategies were tools and resources. You come to the rightplace. Let's accelerate your growth in three to one Thankyo, everybody for joy,yes, torday today we're talking with less trackmen CEO Review, formerHarvard Business School guest, Lecture and author of the new book entitleddon't effit up how founders in their successors can avoid the cliches thatinhibit growth less as an expert enabling founders to scale theirorganizations, and today we're going to focus just on how scale is achieved innew companies and some of the sales pitfalls to be avoided and bestpractices to be utilized hunless. I want to thank you again for taking thetime, especially with the technical challenges we have at the beginning. Iknow you're extremely busy, so let's just dive right in with a little bit ofyour background. Tell us how you kind of came up to get to the CES Bouta ofpure view and and a little bit about yourself thanks cat. Well, I took along and wining path to get here. I would say early on in my career. I ended up inemergens and acquisitions function, which was very fortutous for me,because it gave me the opportunity to see the entire operation of a lot ofdifferent companies. So I tried very hard to learn from the best practicesthat I saw as I went through those processes, and it was a greatenligtenment for me of what you could do right and what you could do wrongand how you could effirt up if you weren't careful so anyway, I went fromthere to to my first co gig and that was replacing a founder in a smallstartup company and because I'm a Gluttan for punishment, I'm now on mynumber, six Os replacing founders. So that's why I got here today, excellent!So the obvious question I have to ask, I know a lot of people are kind ofwondering is: Where did the title? Don't effit up come from? I mean itgrabs attention it and quite honestly, probably sounds like something I'vebeen told a few times in my career, but I'm curious how you arrived at that. Asa top look, I think, we've all been told it. In my case multiple times the titlecame from a founder, who is a still a very good friend of mine who hired meto come on on this company. His company was, was a pretty large company, thetime very successful, but he had figured out that he just wasn't up toplaying the game anymore. So he asked me to come in and to replace him,although he would stay around to help and to participate when necessary, butbefore he gave me the keys, fof the kingdom, he turned to me and he said:Look I've done a great job in creating this company. So far, don't effidem. Sothat's where the title Cape from excellent. In the forward of the book Iknoticed the Matt Marks. He's a professor, an MMYT SLOM schoolmanagement. He refers O her is the most successful. Second CEO he's ever metand I'm curious if you can help our audience understand kind of what Mattwas talking about some of the challenges that lead to the decisionfor a founder. To make that decision, I mean to bring somebody in from theoutside and hand over your. You know baby ters, a big decision, so I'm kindof curious what Youv found throughout your career that you know kind ofbleeds into that decision, t what enables them to do that yeah. So, justlike the example, I gave you with a with my good friend who invited me tocome in to help him run his pretty scaled company already. What happens is many times founders, either voluntarilyor sometimes through their boards, ar investors realize that the role of aCEO is not what they really signed up for founders. Do a lot of magic tocreate companies to begin to grow them...

...and to even just get them past thestage of being vible enthoties, but that's its very different task thanrunning a company with all the processes and the mundane things thatyou have to do to be ace so oftentimes, what you find is a founder will eitherselfselect realize this is not for them, it's no longer fun for them and theyopt out and try to find somebody who can step in to do that. Role or, as Imentioned happens actually very often in the venture capital world is theboard or the investors will determine that the founder did a great job ofgetting the company to where it is, but they need somebody else to lead it forthe rest of the way excellent. So what are some of the challenges that you'veseen as you step into that new role? I mean the founder: Didn't want that job,as you said. What didn't sign up for that? So are there consistentchallenges that you see across these organizations in terms of scaling them?There are, and I wrote a book about it- The book is Chot full of those ideasand issues. I would say some of the more salient ones are that thatfounders often have a difficult time, segregating their personalrelationships with their family teams from the objective reality of thesituation and that's not offensive in terms of what I think about sounders. Ithink it's a really hard job starting a company from scratch, and I think oftentimes you have to have a band of very loyal followers to get through thosereally difficult days in the beginning. But the problem with that is a company.wantsed scales often needs much different talent than that. So I usethe analogy of a snake shetding its skin in order to grow no analogy therebetween founders and snakes, just the process, but the a snake hasto shed its kin because the skin can't grow any further and in fact, in orderfor the snake to be viable at the next stage of growth, it has to actuallyform a new skin and that's the same thing. That founders often have to dowith their initial teans is they have to be willing to shed some of thoseinitial people and it becomes a very, very difficult pro founder who's in thetrenches with this team every day in the beginning, to ultimately wake upone day, open their eyes, alide and say this person who got me to where I amtoday is not the right person to take me to the next lemen hat's a difficultprocess, a difficult decision to make and one that often and outsider canmake up a bunch of easier. In my experience and working for startups inearly stage companies, the the founders- you know it's very personal right: Itis very personal endeavor having started that company and that conceptof shedding skin of you know making surethe right people are on the bus is a tough one. Is it easier for you,because I noticed in the book you mentioned that the founders often stickaround, so how do they often respond when you say okay, we need to. We needto reorder. You know who's on the bus and make sure the right people are in aplace. How do they? How do theu respond? To that? That's a great question. I'vegot a lot of scars on vary sports of my anatomy. From that conversation it'sdifficult and depending upon who the founder is and how much they reallyview you. As a successor in terms of your capabilities and your pedigoreyfor getting there, they either will listen to you gladly in some cases theydo, but more often than not. They are apprehensive about that. They ask lotsof questions in some cases, they're reticent, to do it and in some casesthey're just Downlik, stubborn and won't do it, and so then you get intothat really sticky situation of okay who's in charge. RM. How do o? How do you resolve those guys,your arm wrestling out? Well, you don't know me well enough. o know whether I'ma good arrester or not, but what I would say is we typically rely on thegolden rule for that decision and that's whoever hope to go makes therules, and that's often the anzastors or the controlling investors will makethat decision. If the founder is the controlling investor, they will oftenget their way and if they get their way in terms of designation of WHO's on theteam going forward, that's usually not good news for their successiv excellent,okay, understood understood. When you walk into these organizations, I mean alot of especially today. A lot of the...

...companies are tech focused out that areout there and what I've seen is challenges with them understanding youknow the reality of Revenue Generation, I'm kind of curious what you walk intoand see from a FMOR sales standpoint. How are those team structured or howare they struggling? What kind of challenges are they running up to interms of market penetration and revenue, capture yeah? So usually, when somebodylike me encounters a company started by a founder. The issue is one of its timeto scale revenue, usually not not always, but usually they have a revenueflow they've sold product. As I like to say, the dog will eat the dog food, sothet's, not something that that people want to buy. But often the initialsales are made through e, the personality of the founder, who oftengets involved in all of their initial sales, or sheer brute force of thepersonality that the team has so we're known in the marketplace. Is thisthere's very little process behind it? It's all based upon personalrelationships. Oftentimes founders come out of bigger companies and they oftenuse those bigger companies as their initial customers. So a lot of theinitial revenue comes from relationships and again frompersonality, very little process, and is that one of the first things youlook at is instilling some type of repeatable scale sales process. Whenyou go into these companies, it is what we find is that, if you're going toscale a company, although having te founder around as Awsom good news inthe sales process, because they are good at what they do and they usuallyhave lots of credibility in their marketplaces. What we found isultimately you've got Ta Hihe, a team of what I would refer to veryaffectionately as mere mortal human beigs. So so these are people who are notfounders. They may be good at what they do, but they are not the samepersonality as a founder. They don't have the sayany market entra that thefounder has so they have to work the process. If you will, in order to besuccessful excellent, have you seen any particular things work best for quickerscaling of your sales organizations? Yeah, so what I find in a lot oforganizations that are founder sales driven, if you will, is that thefounder doesn't naturally like process founders, are thypically theretypicallypeople who have done things a little bit differently and that's how theystarted their companies. In fact, that's how they're successful, becausethey as apple would say they think different and that's usually part oftheir success. But when you get to the scaring part, you actually have tothink process, and that is different for a founded, so founders oftentimesto end up hiring a bunch of sales people and they don't really knowwhat's required to manage them. So they don't know how to hold sales, peopleaccountable and probably what's most important is they fall prey to asalesperson WHO's trying to make the founder feel good and the salespersonmay in fact have real sales lads. They may infact the successful andgenerating market interest, but they like most sales people. I would sayfrom a psychology point of view ar optimistic in general, which oftentranslates into happy years. They hear what they want it here andunfortunately they then take that news back to founder or to perhaps theexecutive that the founders hired to run sales and they they create rosysales projections that often become disappointments for management, andthat's a big problem I can definitely see, has a problem for scalability. Isit normal for you to see kind of a host of those types of seels people? I meanalways joke sales people if nothing else should be good at getting a jobright. That doesn't itually mean therand good at performing the job, butin terms of assessing that the sales organization that may be in place wereassessing the market and the direction that you need to go with with scalingand changing that sales organization. How do you approach that yeah? So so Itypically approach a sales organization in a fashion. That's as objective as Ican get and that offin runs, I would...

...say, counter two or is somewhatantagonistic to what the founder is used to or what a founding organizationI's used to. So I like to hold sales people accountable. I think it's not abad thing to do beheld accountable, but I think it's a little bit abrupt whenyou change out a founder who lives on their personality more than theirprocess, and you now in still process or install ta process that you'reasking people to abide by. So what I try to do is ti: Try to create apredictable environment, so I think number one is obviously we have to sellmore or we wouldn't have hired all these sales people and be paying allthis money, so we obviously have to grow our revenue. But in addition tothat, we also have to be able to be somewhat predictable. We have to knowwhen our revenue is going to grow or know that we have a problem in therevenues, not growing, so what we typically fall back on is we fall backon this thing that I like to refer to as confirmations? I know you guys do alot of it in your practice, but it's making sure that we just don't listento what the sales person thinks we listen to what the salesperson hasconfirmed, with the prospect that the prospect actually ficks. How do youexecute that confirmation, because sales people are great hoh? This dealis going to close in thirty days. You know and it sits in a pipeland for ayear. How do you make sure that the sales reps have done thoseconfirmations? Is it a technology thing conversational if it's processing weCEULD TO BE REPEATABLE? So how do you put in place, something that you feelcomfortable that you validated the those confirmations have taken placeyeah? Well, a lot of that I learnt from you guys and from and from the salesprocess. You guys have have been preaching for years and that's what youtypically referre to as a plan letter. I just call it a confirmation, but aplan letter which effectively is the reiteration of a structuredconversation that you've had with a prospect that reiterates what you thinkyou've heard as a salesperson, and that goes a couple of things really reallywell. From my perspective from a from a perspective CEO's perspective, and thatis, it enables me to communicate what I heard to the customer, which makestypically make or prospect which makes the prospect pretty happy that Iactually might have been listening when we had a conversation, because thatdoesn't always happen. T certainly doesn't happen with a lot ofsalespeople, so that's number one. So the the prospect now thinks that I waslistening, but perhaps more important than German to this conversation is, Itell the prospect what I think I heard, and that enables him to do one of us,probably three things, so they can say Yep. That's what I told you, in whichcase you actually now have something that looks a lot more objective thanthe I think the customers going to buy in three weeks. So that's one or two,the customer might say. No, that's not what I said and then often the customilsay. What I did say was this: in which case the sales person is now clarified,they're thinking and you have an objective view of what that customer isreally thinking, and so you go from the happy year to the perhaps the saddiersin this case, but the reality and then the third piece, which is probably thebest of all worlds, is the customer says. Well, you got most of it right,but this is wrong and they fix it for you and what I like to say- and I thinkyou guys probably would agree with this- is when the customer starts to fix whata salesperson has supposed to them. They're now brought it to the solution,they're now part of that solution. So there you have a connection in additionto much more objective information, so I tend to think you can rely onconfirmation, letters or plan letters, much more so than you can rely on the Ithink, or I expect it comes out of a sales person's mouth, and it's alwaysamazed me how many throughout my cre, how many people don't try to get thattype of confirmation. Right that that I want to work with you as a prospect tocome with a solution that fits you r need. I personally get bored sittingaround rattling all features and benefits really rather understand whattheir problem is, and I've seen repeatedly those plann letters and,like you said when they engage back...

...when they say hey, you kind of got thiswrong, or maybe we should do this or hey reward this, because I'm going toaffoard it to my boss, and I don't want them to see a Rin like that. That'swhen you know you've actually got a nice engagement, prospector, a customer.It is, and it makes you unique as a salesperson again just it does say thatyou were listening, but, more importantly, you have a naturalfollowup to whatever your last engagement was with that prospect,which can you get you son, the next step, it's a whet, I call a move ahead,gives you an opportunity to movehead, even if that move ahead? It ends up theend to the movehead. To The you know, disaster I'm not going to make thessale. At least you are making progress towards understanding whether this willtur out to be a Yessalon, no excellent. How have you found the sales teams inthese organizations? Have they been receptive to this type of you knowputting in place process, or I would assume much like you- have to lookacross e organization and decide who should be in the Bessan you shouldn't?You have to do the same thing with the sales organization and some sales repsreally kind of you know they pull back and don't want to engage in a process.They have a tendency to say ND. I know what I'm doing. How often do you haveto really kind of recreate the landscape of the sales organization?Yeah? I would say it's mixed. I would say that in my experience, sometimesyou get sales people who crave this process, because perhaps they want tobe held accountable because they think they're better than the average salespeople and sometimes they are but they're missing that process to get itdone or theyr missing the accountability that sort of mufflestheir prodress. If you will, and sometimes you find the sales people whohave done what you suggested earlier- a great job of finding a job but they're,not necessarily good sales people being that founders are often not tuned intothe to the alcoholic bits and bites the real details of how great sales peoplehow their DNA is really may oftentimes they've, just simply persuaded thefounder that they're good people, I've seen a couple times were somebody thatwas selling something to a founder turns out that the sound has boughtsomething from them said wow, that was a good sales guy and they hire hem tat.It has their skills, have nothing to do with the attributes of thinion in theircompany going forward. So it's a mix tad, but I think reasonably, please,with the with a good portion of the sales people that I found in the field.Excellent excellent. Have you run into founders, saying or smaller companysaying? Oh? Well, we don't. We don't need a process because we hire aplayers like everybody on our team. Is a players? Have you ever seen that andif not just kind of what your perspective on? If I have ten people onthe sales team- and they are all a players, do they still need a processyeah so one? I never met a Salestam that had ten people that were all aplaye startbut. I can tell you that IV probably never run into a founder whodoesn't think they know how to sell better than me, and many of them arebetter sales people than me, but not very often do they understand theprocess is necessary to run a sales people sales team to make a sales treamitself accountable, predictable and successful. So I would say you know Iread it. I ran into one not so long ago, where I had a CEO say to me. Well, theonly thing you will have to worry about is sales, because you know I'm reallygood at that and that's you know my antenna wentstraight up in the air and I said okay, so that's the first place I have toworry is about the sale steam, and it was actually very true that the salesteam needed a lot more health. The founder was a great sale person and theorganization had really just coasted fased upon his personal capabilities,but the rest was missing. Yeah I coul se. I can definitely see that being achallenge, I'm going to kind of change gears here for a second, since youArcou of purview, can you give us just a little overview of what pureview doestoday yeah, so we're in the medical imaging space and by that we work withcompanies. We work with health caroganizations that generate medicalimageas, sosar CTS, Zmri, xrays hultersounds things like that, thebiggest problem that we found in our industry. Just although there are a lotof big players, there's the Samen...

...theaxis, the ges of the world that havebeen doing this for years. It is very difficult to transport. These imagestheyre very dense, very large size files, they're hard to transport, theirheart to share theyr hard to aggregate in the location that they're needed inorder to do the diagnosis for that patient in a timely matter. So what wedo is we lake those studies, images available where they're needed whentherneeded and on any platform? So we are a supplement or a compliment to the bigsystems that are out there and, and we work in a lot of environments. One ofthe biggest environments that were found in is second opinions. So manylarge health organizations offer out their experts their specialists toprovide second opinions, so not primary diagnosis for their patience andpatience more and more these days, especially if it's an egregious illness,water, second opinion, and in order to get that second opinion, they have tohave their images sent to that doctor whereofer that doctors located. That isa difficult process, and so we play that intemediary roll where thetransport layer, if you will for that image and we get it there in a timelymanner and you can do it pretty efficiently. Okay, actually t at has aCEO er, your what our salespeople would refer to as a target or a prospect. SoI'm kind of curious when somebody's trying to sell to you. What is it thatgets your attention or what sets you know salesperson apart from the packwhen they're trying to interact with you in order to get your business yeaht's, O, that's a great question. I could tell you, I could probably do abetter job. It telling you what what doesn't attract. That's fine thats,fine, what repells me because it happens most of the time and that'sthat a salesperson will without any introduction, will try to contact meand will start small talk with me less. How are you doing this afternoon? That's a really bad intro! So one Idon't know who you are and to you have no right to ask me how I'm doingbecause I don't I don't care who you are and I n I N. I don't think I careto tell you how I'm doing as a CEO, usually you'r not doing well yogot things that you're aggravatedabout kind of change things whatever. That is, so that's one. So it's theit's a salesperson who has no permission to contact. You asking youan Ame questions, that's one to it's, the salesperson who says to you. Peoplelike you, have to do these things and I can provide you with those things andsame approach. I take with that one which is I'm not like everybody else. Ihave special needs and you have no right to tell me that I fall into thecategory along with all these other people that you're selling to so treatme special and then we can potentially talk. So I think that's that's. Thoseare the two I'll call them repulsions that I have as a CO target as you callit, which I think we are because people buy our names off a Malis in I found,but I think the thing that's most important to me is: If somebody takesthe time to understand my business and understand me, and they want to bepersistent about getting to me, but they show that they know something.That is not obvious about me. That's what gets my attention so, ifsomebody's taking that kind, I say hey, you know what, if this guy's going totake this much time before I've even said hello to him or her, then perhapsthey're going to be smart enough to figure out that they can help me withsomething and at least I'll, listen and so that's kind of where I draw the lot.Do you instill that same type of practice into your sales teams? Itpurviewor other places that heave been. I do one of the things I have about petpeeve with sales people and I sinin them all the time. You should nevercontact somebody unless you've done all the research you possibly can tounderstand them and their business. You know I started out before there wasthis thing called the Internet back then it was a little bit more difficultto do research on people, but today using lengt in or something else youcould go right on there. You can find me you can find where I went to school.You can probably find my kids names...

...where you can find anything on theInternet these days, and if you can do that, then you are in a much betterposition to engage with that prospect. So don't try to engage with a prospectunless you have that information. First excellent excellent advice. I G, Iagree one hundred percent- it's doesn't take a lot of time and it makes all thedifference in the world so were getting close to the end hereand as we wrap up, we have this tradition or I don't know, call it acute little marketing trick that we do is part of the podcast. I ask all ofour guests. If you had one acceleration insight to give to a sales,professional or marketing professionally the one, what would itbe and why wow putting me on this spotal, the one acceleration well otherthan I think it goes on said that this confirmation thing really is very, veryhelpful. But what I would say is this: For most sales people, starting outthere is no substitute for prospective so a lot of sales people that I meetsay. You know what I'm pretty smooth, I'm pretty DEP and air, I'm prettyhandsome, I'm pretty good looking. I don't need to do all that prospectingand by the way I have this really big roll of decks that I took from my lastjob, hopefully without a non compete, and so I don't need to do all thatprospecting. There really is no substitute for prospectivg. Ultimately,you have to build the pipeline, so you have to engage as I like to refer to itsales as a context port. You got to have some contact wher, you can't makeany faild, and so you got to do that prospecting at some level. Now a lot ofthe new technology that's out there and we use a lot of it here, perview, whichis in bound marketing to lead generation, and so a lot of ourprospects come to US already, half warmed, that's great, but you got itavail yourselves to those contects. You have to contact them. You have to reachout. You have to make the that ingratiating contact which says youknow something about them, but if you don't do prospecting as thiy like tosay in sales, if funnything happens, which is nothing it's very true, when you ask salespeople, we ask in class, you know who love sales and, what's your favoritepart, I can count on one hand the number of classes I've been in wheresomebody says they love the prospecting process, but without it there's there'sno other right, tthere's, nothing left tin, the funnel to Ta. So one thing Iwoant to make sure we do is: I want to make sure wer tell the audience wherethey can get a copy of your book. So where would be the best place for themto go to get a copy of? Don't eff it up yeah the book will be available onAmazon, starting about the fifteent of July of this year. So it's about tocome out. You can find it either by searching, don't eff it up or if that'sa problem, just search under my name, Trackman Tra, Cht man and you will findit excellent and what's the best way for people who might want to connectwith you after the show to do that, yeah. The best way to connect with me.I is right through my email address. Email is for me. Email is always thebest way to contact me, because that way, if I'm busy I can get back to you,the email address to use is less les at Perview Dot, net Pu r view perview dotnet and that'll get right to mic. I would I'd love to hear from anybody.That's at has any interest in the topics that we've talked about, I'mpretty passionate about this whole process and happy to help excellent les.This has been great. I can't think you enough for the time and when everybodyin the audience please go out, get a copy on less his book in July when ithits the hit's the shells. I've been lucky enough to see early copy of itand it's definitely worth the read not just for founders. I think sales peoplecould get a lot from it as well. So thank you again less and until nexttime I wish you nothing, but the best thanks, Yat apprecatn you've been listening to the BTVrevenue executive experience to ensure that you never miss an episodesubscribe to the show, an itunes for your favorite podcast player. Thank youso much for listening until next time.

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